The Pearson Era

By Steve Mitchell

Article taken from Good Old Boat magazine: Volume 2, Number 6, November/December 1999.

Starting in a garage, cousins Clinton and Everett
Pearson
initiated an era in yachting history

It's a familiar story to sailing buffs. The Pearson cousins, Clinton and
Everett, began the modern era of fiberglass production sailboats at the
New York Boat Show, in January 1959, with the introduction of the Carl
Alberg-designed Triton. They sold 17 of those 28-foot boats at the show,
and "it started us chasing money," says Clinton. Indeed, that one show
put the fledgling company on the map and in solid financial shape, but
this well-known story reveals only part of the roots of Pearson Yachts.

"The Navy ROTC sent me to Brown University," says Clinton, "so after I
graduated, I had to serve three years of active duty on the destroyer
Joseph P. Kennedy. This was from 1952 to 1955. While on the Kennedy, I
built a small model for an 8-foot fiberglass dinghy. Later, I built a
mold for the dinghy in my father's garage. I started the company in May
1955 with the $2,000 I received when I left the Navy."

Clinton tried making the dinghies using a vacuum process. "But I had no
luck with it after six or seven attempts. So I started making them from
mat and resin in a lay-up in the garage."

It didn't take Clinton long to run out of money. He started working for
an insurance company during the day and making the dinghies at night.
But sales were promising enough for him to incorporate in early 1956.
A high-school classmate named Brad Turner helped out by investing $5,000
in the business.

Clinton's cousin, Everett, who was a couple of years behind Clinton at
Brown, also served in the Navy after graduation. He worked with Clinton,
building the dinghies when he could, and was able to come to the new company
full-time in 1957. Fred Heald, a fellow Brown alumnus, joined them as
head of sales.

At the request of customers, the cousins built larger dinghies, which
they exhibited at the New York Boat Show in 1957. Sales were so good that
the young company needed room to expand. The Pearsons found an empty textile
mill on the waterfront on Constitution Street in Bristol, R.I., with a
flexible lease that allowed them to pay just for the space they used.
Soon they were renting the entire first floor. By the time of the show
in 1958, they also were making 15- and 17-foot runabouts based on Clinton's
designs, in addition to the line of dinghies.

Things started to gel in 1958. "A fellow named Tom Potter, who worked
for an outfit called American Boat Building, over in East Greenwich, asked
us if we would be interested in building a 28-foot fiberglass sailboat
that would sell for under $10,000," says Clinton. "Tom knew Carl Alberg,
who was working at the Coast Guard Station in Bristol, across from where
we were renting space. We agreed, and Tom had Carl design the boat for
us. So Tom Potter was really responsible for the concept of the Triton."

Big in Europe

"I had an idea for a family cruising boat using fiberglass," says Tom.
"Family cruising was a big thing in Europe at the time, but not in the
U.S. The idea hit me that we could do the same thing, and it would be
successful if the price was under $10,000. Everyone was still building
boats from wood, but I thought fiberglass was the way to go." Building
with fiberglass allowed for a much roomier interior compared to wooden
boats.

Tom adds: "I approached a number of people about my idea. My employer
at the time, American Boat Building, wasn't interested. I talked to Sparkman
& Stephens. They wouldn't give me the time of day. I got to know Carl
while I was at American Boat Building, and talked to him about the idea.
He's the one who introduced me to Clint and Everett. He knew they were
building fiberglass dinghies and runabouts across the way from him and
thought they might be interested in building a sailboat. Naturally they
were. So Carl designed the boat, and I financed the tooling for it. Carl
had been designing ammunition boxes for the Coast Guard when the Triton
idea came along."

The cousins built the boat and had to borrow money to truck the Triton
to the 1959 New York Boat Show. They didn't even have the cash between
them to pay the hotel bill. The boat's base price was $9,700. When it
became an instant success, with $170,000 in orders, the hotel bill was
paid, and the young company was off to a solid start.

"Right after the boat show," continues Clinton, "we still needed money
to build those 17 boats. We already owed the bank $6,000, and we had to
go back to the bank to ask for even more. We asked for - and got - $40,000.
That started us chasing money. From the very beginning, we had to chase
sales to pay off loans, a never-ending process.

"Carl sold the Triton plans to us for $75," states Clinton, "and then
he wanted royalties of $100 per boat sold." The Pearsons agreed to those
terms, although eventually it would work against Carl.

Flush with the success of the January 1959 show, the cousins took the
company public that April. "The shares opened at $1," says Clinton. "They
were $3 a share the next day. By the end of 1959, the price was $13 a
share."

Sales stayed strong enough for the company to add another production site.
Pearson bought the legendary Herreshoff Yard in November 1959 for $90,000,
half in cash and half in stock. Production also continued at the Constitution
Street site in Bristol.

Clinton explains, "In 1959, the market was just right for us. The price
[of the Triton] was right. Leisure time was a big thing. They were pretty
simple boats to build at the time, and we tried to build one boat a day
to keep up with the demand."

Controlling interest

In 1960, the Pearsons were trying to obtain approval for another stock
offering, but had trouble getting the proposal through the Securities
and Exchange Commission. The money chase was continuing, and the company
needed another cash infusion to finance its rapid growth.

"Luckily, Grumman was there and interested in the company," says Clinton.
In 1961, Grumman Allied Industries bought a controlling interest in Pearson
Yachts for $800,000. Grumman wanted to diversify its military-aircraft
business. It already had an aluminum-canoe division as a toehold in the
boating industry. Grumman sought a stake in the developing fiberglass-technology
area, and Pearson was a leader in the field at the time. The Grumman purchase
started a long period of growth and stability for the yacht manufacturer.

With the full backing of the new owners, the Pearson cousins expanded
production to include more boats, both large and small. Most also were
Alberg-designed boats. The 20-foot daysailer called the Electra, "which
we made into an open 22-foot daysailer called the Ensign," says Everett,
was added in 1960. The Alberg 35 followed in 1961.

According to Clinton, "When we started building the Ensign, it was an
exception [to the one boat a day goal.] We eventually got that line up
to two a day, then three a day" to meet the demand. It became a popular
one-design racer, with nearly 1,800 produced in its 21-year production
run.

Other Alberg designs were the Rhodes 41, a 26-footer called the Ariel,
and a 16-footer called the Hawk. Pearson also built the Invicta, a 38-footer
designed by Bill Tripp, in the early 1960s. "It was the first production
fiberglass boat to win the Newport-to-Bermuda Race, which was the 1964
race," Everett says proudly. The young firm also produced powerboats,
including the 34-foot Sunderland.

States Clinton, "A lot of credit for the early success of the company
has to go to Tom Potter for selecting a line that would sell." For his
part, Tom says, "Fred Heald and I were close friends, and we ran the marketing
end together. I primarily worked with the designers on boats we thought
would sell, while Fred worked more on marketing the boats. It was a pretty
exciting period of my life."

As with the Triton, Carl Alberg received a royalty on each of his designs
that was sold. "As the boats got more expensive, the royalties went up,"
states Clinton. "By 1964, Carl was making $40,000 a year from us, on top
of what he made from the Coast Guard. Grumman wasn't happy at all with
the royalties and said we should hire our own architect." But first, Everett
approached Carl about renegotiating the deal on royalties. "He was a stubborn
Swede and refused," says Everett. "So we had to say: 'No more boats from
him.' "

A Grumman employee named John Lentini had a hand in the next serendipitous
step for Pearson Yachts. John had purchased a sailboat designed by the
prestigious New York firm of Sparkman & Stephens. One of the naval architects
involved in that boat was a young fellow named Bill Shaw, and he and John
became acquainted. When Lentini learned of the opening at Pearson Yachts,
he mentioned it to Bill, who went to Bristol, R. I., for an interview
with the Pearson cousins.

Momentous year

"I had worked for Sparkman & Stephens for 11 years before leaving to work
for an outfit called Products of Asia, which also was based in New York,"
says Bill. "It imported custom wooden yachts from Hong Kong, and I ran
their marine division." The company's most famous import later on was
the Grand Banks line of trawlers.

The interview went well, and Bill was hired as the Director of Design
and Engineering with a starting salary of $18,000. "We hit it off," says
Everett. "It worked out very well."

"Rhode Island was my home state, and I was thrilled to be able to return
there," he adds.

As it turned out, 1964 was momentous for Pearson Yachts for more than
the hiring of Bill Shaw. Grumman financed the construction of a 100,000-square-foot
manufacturing plant in Portsmouth, R.I., and planned to move the company
there the following year. "Lots of people didn't want to make the move,"
says Clinton. "Plus, Grumman fired me in 1964."

Fired?
"Yep, fired."

"My boss was a sailor," explains Clinton, "and thought himself an expert.
He was the comptroller of Grumman but actually acted more as the treasurer.
We got along OK for a couple of years, but what set him off was a new
concept we had. Tom Potter had an idea for a full-powered auxiliary. This
comptroller said we needed to sell five of them before we could go with
it. We discussed this for an hour at a board meeting. At the end of the
discussion, they took a vote, and I won. I knew that sealed my fate. The
boat turned out to be the Countess 44, which was quite successful.

"I really hated working for a big company," Clinton goes on. "I had already
made plans to do something else. I was ready to resign anyway. If they
had just waited a few more weeks, I would have left on my own, and everyone
would have been happy."

Clinton bought out a troubled sailboat-maker called Sailstar in West Warwick,
R.I. "I still had the lease on the Bristol factory, and moved the company
there," he says. "Carl Alberg designed a 27-footer for me. I called it
the Bristol 27, and soon the Sailstar name faded away." He changed the
company's name to Bristol Yachts, and thus was born another famous sailboat
manufacturer with a Pearson pedigree.

Back in Portsmouth, business was booming for Pearson Yachts, but not everything
the company was building would float. Grumman combined the sailboat company
with its subsidiary that made aluminum canoes and truck bodies. "Grumman
was building aluminum trucks for United Parcel Service," states Everett.
"Soon Pearson Yachts was making the fiberglass rooftops and fronts for
the trucks. We did it really just to accommodate Grumman."

Tom Potter was the next to leave. "I hated working for Grumman," he says,
"and I quit. I actually was out of work for a while when Clint asked me
to join him at Bristol. He was building stock boats, and I wanted to do
custom work." Tom stayed with Bristol Yachts until he retired in 1972.
He then went back to school to become a naval architect and began a second
career designing boats. Today at the age of 84, he's still designing sailboats.

Pearson 30 from Pearson marketing materials.

Special permission

By 1966, Everett Pearson also was ready to leave. According to Everett,
"We were run by a board of directors. We had to write quarterly reports
and go to board meetings. I didn't like it at all. My interests were in
producing sailboats. I decided to go out on my own. I agreed not to compete
with the company for three years, so I decided to go into the industrial
business.

"But first," continues Everett, "I helped out with a 58-footer for a fellow
I knew named Neil Tillotson. I had to get special permission from Grumman
to do the boat, which was granted since it didn't compete with anything
Pearson was building." Later, he teamed up with Tillotson to form Tillotson-Pearson,
Inc., which has become a major force in industrial uses of fiberglass-reinforced
plastics and other, more exotic composites. Known today as TPI Composites,
its varied product line includes windmill blades, flag poles, aquatic
therapy pools, and J-Boats, among other sailboats and power boats. Everett,
65, now serves as chairman of the board of TPI. Just 10 short years after
it all began in Clinton's garage, no one named Pearson was running Pearson
Yachts.

"Shortly after [Everett left], Grumman asked me to run the company," says
Bill Shaw. "Never having done that, I said sure." Bill was made the general
manager of the Pearson Yacht Division.

"We put together a great team," he continues. "And Grumman was great to
work for. They were very supportive in getting us the best equipment and
machinery. We had computers to help us cut out materials. They also expanded
the Portsmouth facility later on so that we could build bigger boats."

According to Bill, Grumman also started making firetrucks and motor homes
based on a truck body. "It's interesting to build boats on one side of
a plant, and motor homes on the other. I had to be a diplomat. At one
point, we even built some modular housing for Grumman. We erected it at
the plant and used it as an office as a prototype." Grumman began manufacturing
the housing at another site and continued making aluminum canoes in New
York.

Under Bill Shaw's leadership, Pearson Yachts enjoyed rapid growth in sales
in the late '60s and early '70s. The product line was varied and included
powerboats as well. Sizes ranged up to 44 feet, thanks to the new production
facility Grumman funded. Then the fuel crisis hit in the early '70s, and
the company found itself at a crossroads of sorts.

"When the fuel problems hit," says Bill, "the powerboat business was hurt
badly. We found that people went to sailboats who never thought they'd
set foot in one previously. We decided we were a sailboat company and
wanted to concentrate on that. We also came face-to-face with the realization
that to be successful in that line of business, we had to be committed
to the dealers. Other manufacturers were always after our dealers, too,
trying to steal them away from us."

Bill started holding meetings with an advisory board partially composed
of dealers. "The boats were developed with specific price points in mind
and with dealer input," he continues. "A new design had to satisfy a lot
of people; otherwise it wasn't worth the trip. More than once we had what
we thought was a great idea, but the dealers would turn it down. We would
pull them into the plant and bounce ideas off them. They were extremely
helpful to the success of the company."

Condo boat

John Burgreen, who now owns Annapolis Yacht Sales in Annapolis, Md., one
of the earliest Pearson Yacht dealers, was one of those dealers Bill counted
on. "Pearson would get a group of us together from different parts of
the country," explains John, "to brainstorm new ideas. We talked about
what should go in a particular boat, what the market was demanding. We'd
discuss such things as heads that had to be bigger, or we had to have
stall showers, or we needed more performance-oriented boats, or more cruising
boats. All the dealers worked together pretty well.

"One boat that comes to mind," muses John, "is the Pearson 37. We called
it the condo boat. We had more fun than you can imagine working on that
boat. We went berserk. Everyone there was at fault for that one, although
it did pretty well."

The 37 was introduced in 1988 to considerable dock chatter. At the Annapolis
Boat Show, people could be heard saying, "You've got to see the Pearson
37!" The boat had a queen-sized island berth forward, two swivel chairs
in the saloon, a television and stereo center, and a separate shower stall.
The cabin was about the most luxurious to be found in a production sailboat.
It made a definite statement about how serious Pearson was at attracting
new customers in a changing market.

Another key factor in the company's success was its advertising firm,
Potter-Hazelhurst. "Their strength was marketing, not necessarily in printing
pretty ads," Bill says. "One of their employees developed an index of
buying power by county and city for the whole country." The company used
the data to develop sales estimates for particular markets, a most effective
tool. "It worked well for the dealers, giving them sales goals, and a
good idea of what their sales should be," he adds.

According to Tom Hazelhurst, his firm handled Pearson's marketing and
advertising efforts from 1969 until the end in 1991. "Pearson grew during
that period, and so did we," he says. "Under Bill's tutelage, they built
damn good boats. I'm not saying that because I was their advertising man,
but because I bought two of their boats. The boats just don't break."

In 1980, Grumman expanded the Portsmouth plant to 240,000 square feet
to build even larger sailboats. The Pearson 530 was the largest boat the
company ever built. The firm also began building power boats again, although
none was designed by Bill.

By the mid-'80s, Grumman started looking for a buyer for Pearson Yachts.
"I tried to buy the company in 1985," says Clinton, "when Grumman made
it known they wanted to sell. But the deal didn't come off. Times were
already starting to change in the sailboat business. Pearson only lasted
as long as it did because of the kindness of Grumman. I doubt the company
ever made any money for Grumman."

Bill Shaw disagrees. "We certainly had some lean years, but we also had
some very productive ones," he states. "Sure, Grumman looked at it as
a business, and we turned a good profit for Grumman in the healthy years,
especially when we started building the larger boats with larger profit
margins. I don't think they would have kept the company that long if we
weren't doing well for them."

Business downturn

The Pearson Ensign has remained a popular one-design racer since its introduction in 1962.

In March 1986, Grumman sold Pearson Yachts to a private investor group
headed by Gordon Clayton.

"Gordon had no prior experience in the boating business," says Bill. "When
he came on board, we looked forward to taking advantage of his overall
business experience to add a healthy element to the company. It's unfortunate
that when he came along, business started going badly for the entire industry."

The company was also faced with an aging model line. "Things like aft
staterooms and open transoms were popular, and we couldn't add those features
to many of our boats," Bill explains. "We worked with the models we could
adapt. For example, we brought back the 34, and we also changed the 36,
which we extended and called the 38."

In 1987, Pearson introduced several new designs with wing keels and 10-year
warranties against hull blisters. "I'm partial to centerboarders myself,"
adds Bill, "but not everyone is. The wing keel was a good way to get shoal
draft."

Gordon Clayton was "aggressive in picking up Sunfish and Laser for us,"
says Bill, "and also O'Day. That gave us entrée to a segment of the market
we had missed before." O'Day also had acquired the Cal name earlier, so
Pearson had a number of well-known names for marketing purposes.

But a general drop in business was well under way. The money chase that
began in 1956 for Pearson was getting tougher.

Bill Shaw says of the demise of the company: "It was a number of things,
not the least of which was a rapid fall-off in sales volume. When we thought
about it, the most serious competition we had going against us was our
old boats. Also, sailing was getting so expensive, and that created a
loss in interest [by the public.] When the Ensign first came out, it sold
for $4,000 to $5,000. At the end, it sold for $14,000, and not one screw
was different. The Ensign association wouldn't let us change anything.
Add to that the rising costs of slips and insurance, and owning a sailboat
was simply too expensive for many people.

"We needed volume to make a go of it," continues Bill, "and without that,
we had to increase prices. We couldn't just cut out the unneeded overhead.
We had that huge 240,000-square-foot plant for one thing."

By 1990, the boating industry was rocked to its roots by an economic recession,
and by a 10-percent federal luxury tax on such items as new boats costing
over $100,000. While Bill maintains the luxury tax had little impact on
Pearson, because few of its sailboats cost over $100,000, the buying public
was confused about what the tax did and did not apply to. For example,
the tax did not apply to brokerage boats - but sales of those fell, too.
Many wealthy clients simply stopped buying boats altogether, refusing
to pay the luxury tax on general principle even though they could easily
afford it.

The end result was disastrous for many boat manufacturers. The drastic
drop in sales forced Pearson into bankruptcy court in 1991, with Bill
retiring just before the end. "I miss the business tremendously," he states.
Bill, now 73, has had some health problems, but "with medical science
these days, they keep me going," he says.

Record production run

When asked to name his favorite from the many designs he did for Pearson
through the years, Bill laughs, saying, "I get that question a lot. When
I was active in the company, my answer always was 'the next one.' In its
day, the Pearson 30 (pictured on Page 19) was quite successful, especially
with racing in mind. I'm helping my son do some alterations to his 1972
P-30. I also am very partial to the 365 as a cruising boat. It was so
popular we had two production lines for it. It's a good, wholesome cruising
boat. The Pearson 35 was one of our most successful. It was in production
for 14 years, which was quite a record. We never approached that again.
Most designs would last five years or so.

"I get several calls a week from boat owners, asking for help," he continues.
"When the company went on the blocks [with the turmoil of many ownership
changes] we lost control of so much. Everything was documented so well,
and that's all gone now. When I get calls now from owners about their
boats, I can't answer them unless I can remember, and that is getting
to be more of a problem," he chuckles. "It was a wonderful 27 years for
me."

Shortly after the bankruptcy, the Pearson molds and trademarks were sold
to Aqua Buoy Corporation. To make the situation even worse, Aqua Buoy
went bankrupt before taking possession of the molds and moving them from
the Portsmouth plant, which Grumman still owned. Grumman reacquired the
molds in a bankruptcy sale.

This began a tumultuous time for the remnants of the Pearson name and
molds. Through a series of other sales and actions, the Pearson and Cal
molds and trademarks eventually were sold to a new company, formed in
January 1996, called Cal-Pearson Corporation. In the disclosure statement
sent to prospective stock purchasers, the principal office was listed
as Bristol, R.I., but the corporate office was in Bethesda, Md. Clinton
Pearson was listed as the chief executive officer and Christian Bent as
the chief financial officer. The company began a campaign to raise the
capital needed to build Cal 33s and 39s and Pearsons ranging from 27 to
39 feet. Bristol Yachts, then owned by Clinton's two sons, was to build
the sailboats.

The exact number of boats Cal-Pearson actually built is not known, but
certainly is in single digits. The company exhibited boats at the Annapolis
Sailboat Show in 1996 and 1997. By 1998, no one was answering the phone
at the Bethesda office, and the company disappeared in a cloud of lingering
debt. A big part of its demise was the bankruptcy of Bristol Yachts, which
left Cal-Pearson with no manufacturing partner. According to one insider,
Cal-Pearson essentially ceased to exist when Bristol Yachts was forced
into bankruptcy and its assets were sold at auction.

According to Clinton, "The Bethesda group offered me some stock to help
them start the company. They were looking to publish the fact that I was
involved to stimulate interest in others. They found it harder to raise
money than they had thought. They did raise money in New York, but the
overhead was so high with lawyers and accountants. It was a good idea,
but only if they could have gotten proper financing. Training a new crew
is so hard. It just takes quite a bit of money to get something like this
started. Quite a few dealers were enthusiastic about the name returning
to the market, too."

Clinton, who is now 70, is "not currently active in the boat business,
and I have no intentions of getting back into it," he says.

* (Other sailboats came
later, of course, and
dinghies and motorboats
also were manufactured
in the early years.)

Says Everett of the Cal-Pearson Corporation, "So many people jump into
the boat business without knowing what it takes. They were trying to market
10-year-old designs, and that is tough to do in today's climate. People
knew they were old designs because their competitors were constantly pointing
it out to the public. And trying to start the Cal line at the same time
was too much."

Bill Shaw has a similar take on the short life of Cal-Pearson. "People
absolutely lose their smarts when they get around boats," he says. "It's
a different world out there today. Unless you have a big bankroll, you
can't make it. To develop a new 35-footer, with molds and tooling, would
take several hundred thousand dollars. If you are looking at a line of
eight to 10 boats, as they were, it just doesn't make sense."

But the venerable Pearson Yachts name refuses to die. At the National
Pearson Yacht Owners' Association rendezvous in Bristol, R.I. in August,
Everett Pearson announced to the group that his company, TPI, had just
purchased the trademarked name of Pearson Yachts. (See related article
on Bristol Yachts on Page 73.)

Says Everett, "I wanted to grab the name while I had the chance. We didn't
buy the molds. All that stuff is too old."

He continues, "We do plan to develop new models. I bought the name so
we'd have it there. But we have some projects involving buses, people
movers, and a couple of other things that I need to get moving before
we start [on a new Pearson product line]. We have some guys working on
it, studying the market. Up here in New England, we're more efficient
at building large boats, rather than competing with small-boat manufacturers.
So we probably will start with something over 35 feet, maybe in the 40-
to 42-foot range." It probably will be at least one to two years before
any new Pearson yachts hit the market."

When asked the purchase price of the trademarked name, Everett replies,
"I haven't told anybody. I paid too much. But when you're buying your
own name back, you get carried away." He was determined to make the purchase.
"It took me three months of phone calls to track these people down," he
says.

TPI will handle the marketing itself, as it has done for several of its
other boat lines. Everett foresees a network of six to eight dealers.
"That's all we'd want. We need to give them enough territory so that they
don't compete with each other."

With some 20,000 boats out there bearing the Pearson name, from eight-foot
dinghies to 53-foot sailboats, the Pearson legacy is already well-established
in the history of boating. Very active owners' groups keep interest in
the boats quite high. In some areas, certain Pearson models sell by word-of-mouth
without even being advertised. The Pearson name also is one of the most
active on the Internet. Pearson bulletin boards abound on the net, and
usually are among the most active in the online sailing community.

Certainly, Pearson owners can take solace from knowing that for the first
time in over 30 years, someone named Pearson once again is in charge of
Pearson Yachts. The symmetry of events is satisfying for a company that
has endured so much turmoil in the last decade. Pearson Yachts sails on.

The original publication of this article included sources of more information on Pearson sailboats, most of which is long out of date now. You can find Pearson information on our Owners' Associations page.

When not working at his job for the federal government or singlehanding his
1989 Pearson 27 in the Annapolis, Md. area, Steve Mitchell is a part-time
freelance writer. He writes for a variety of business and boating publications.